Inflation Investments Will Be Important in 2009

Inflation investments are something that many investors will be searching for over the next six months.  The Federal Reserve Bank continues to spend billions of dollars each week in an effort to get this economy going again.  Unfortunately, free market capitalism does not work that way and we are likely to see hyperinflation if they continue to spend money the way they have been.  Ben Bernanke and President Obama seem to think that they can print the United States out of this recession.  It will be very interesting to see if they are successful doing it.

What is also intriguing is the fact that daily mortgage rates continue to stay low.  The reason they have stayed at low levels is because of the government interaction.  By buying up mortgage backed securities and auctioning off billions in treasury bonds, the United States government is forcing overall rates to stay low.  Eventually free markets will work and we will see a whiplash affect as rates shoot much higher in a few short weeks.  We saw just a glimmer of this at the end of May and beginning of June when rates were up almost a full percentage point in two short weeks.

With all of this knowledge, it will be very important to use it to make the right investments.  During an inflationary period, putting your money in commodities has always proved to be the best return.  Some investors prefer to buy physical commodities while others buy ETF's.  Either way, make sure to make smart inflation investments over the next few months to get your best investment gains.